Car Dealership Shenanigans

[Bryan Barnfellow]

Regarding financing....


I've heard people say to get the best deal you need to finance the car.... Maybe the dealers are getting kickbacks, I don't know, but I've felt pretty good about the cash deals I've been making.... If a dealer won't talk "cash" with me, which hasn't happened in years, I'm out the door... I know there are pros and cons to financing "anything" but to me paying for it upfront and being done with it has value too... Again, YMMV, just like your opinions!

When I bought a car in the States I told them from the start that I wanted to finance it, then negotiated the best price, knowing that they were getting a one-time kicker from the financing part. Once I received the payment booklet from the bank I sent a check for the full amount.

-BB

 

[JP.mpls]

I always finance. I figure I can pay it off as fast as I want. I also assume they will price higher if this isn't done.

If you don't have a trade in, you can compare offers and negotiate the whole deal online. It is the way to go.
I traded my car in last time, and ended up negotiating in person. Ugh.

They were having a big July 4th sale, and the advertised price with sales incentives was excellent. All my negotiating was with the trade in value and interest rate.

When it came to signing the deal, the vehicle price was +$500 from the advertised sale price. WTH. I called the sales guy on this, and he acted surprised. Went into the finance guys office for 5 minutes, and came back with new numbers reflecting a $500 lower price. He said it was a mistake, but I still believe they did it intentionally.

JP

 

[Ready]

I guess I’m one of the few people who has generally enjoyed the process of negotiating the purchase of a car. But I spent my entire career negotiating deals much larger in dollar value, so negotiating with car dealers was more or less a form of entertainment for me.

It’s been more than 20 years since I’ve negotiated the price of a car inside an actual dealership. The internet has made sourcing prices for vehicles almost effortless. By the time I showed up at the dealership the price had been set and I was walking in with a check to pick up my car.

But our last two vehicle purchases were Tesla Model 3’s. We placed the order online, just like ordering some toilet paper from Amazon. That is the way all car purchases should be, and most likely will be in the not too distant future.

 

[athena53]

I always finance. I figure I can pay it off as fast as I want. I also assume they will price higher if this isn't done.

In 1991 I financed through the Toyota dealer. They folded the price of the burglar alarm and rustproofing (yeah, I know) into the financing although I said I wanted to pay it up front. I'd also wanted to pay it off in 30 months but they didn't have that so they made it 36 months. No problem, I thought. I'll just add the cost of the burglar alarm and rustproofing into my first payment and make the payments that would have it fully paid off in 30 months.

Thirty months later I call them. I still owed $1,000. No break on the finance charges unless you paid it off in a lump sum- no break at all for accelerating payments. I was livid. It was one of the reasons I never even considered a Toyota again.

I hope they don't still do that.

Another favorite trick- a couple of times I found credit disability insurance added into the payment. I did get that removed. The one time the bank employee was kind of surprised when I told her that the payment was coming out a few dollars higher than my calculations and did it include some sort of insurance? She asked me what I did for a living. I'm an actuary and can do compound interest calculations in my sleep.

 

[mystang52]

Another favorite trick- a couple of times I found credit disability insurance added into the payment. I did get that removed. The one time the bank employee was kind of surprised when I told her that the payment was coming out a few dollars higher than my calculations and did it include some sort of insurance? She asked me what I did for a living. I'm an actuary and can do compound interest calculations in my sleep.

Some 30 years ago, having just moved into our barely-affordable home, I got in a car accident that totaled my car. Financing my replacement car purchase was pretty much mandatory. After negotiating price, and using an old-fashioned loan payment chart, the finance agreement looked higher than it should have been. They had tried to sneak in both credit disability and life insurance. And, it wasn't easy getting the dealer to remove them. Like I said, I was in a tough situation so walking away was not an easy option at the time.

 

[eytonxav]

I usually try to find a car that I want on the dealers lot. And also time the purchase to the end of the month or even better quarter. Get a target to shoot at like the Costco auto purchase program, KBB, etc and then shoot for something even lower. Ask for extra accessories, extended maintenance, etc as sweeteners. It is surprising how good some deals can be if you have the patience to make them work for your business.

 

[scrabbler1]

In 1991 I financed through the Toyota dealer. They folded the price of the burglar alarm and rustproofing (yeah, I know) into the financing although I said I wanted to pay it up front. I'd also wanted to pay it off in 30 months but they didn't have that so they made it 36 months. No problem, I thought. I'll just add the cost of the burglar alarm and rustproofing into my first payment and make the payments that would have it fully paid off in 30 months.

Thirty months later I call them. I still owed $1,000. No break on the finance charges unless you paid it off in a lump sum- no break at all for accelerating payments. I was livid. It was one of the reasons I never even considered a Toyota again.

I hope they don't still do that.

Another favorite trick- a couple of times I found credit disability insurance added into the payment. I did get that removed. The one time the bank employee was kind of surprised when I told her that the payment was coming out a few dollars higher than my calculations and did it include some sort of insurance? She asked me what I did for a living. I'm an actuary and can do compound interest calculations in my sleep.

One of my many spreadsheets, my fellow actuary (I don't actually have the letters after my name, I worked in that field, though, as you know), is one which can determine a monthly payment and amortization schedule on a loan based on the interest rate, principal, and number of payments. I wonder how a car finance guy would react if I brought my laptop, called up my spreadsheet, and figured out the monthly payment myself, thereby exposing any shenanigans like the one you described with the credit disability insurance? (I have never take out a car loan, paying for each of my 3 cars going back 34 years, with cash.)

 

[travelover]

..........Thirty months later I call them. I still owed $1,000. No break on the finance charges unless you paid it off in a lump sum- no break at all for accelerating payments. I was livid. It was one of the reasons I never even considered a Toyota again...........

This would make me furious, too, but don't blame Toyota or any other car company. The dealers have an amazing amount of leeway in the way they run their businesses, often protected by local and state laws. In my work as a MegaMotors engineer, I was disgusted by the way some dealers treated people. Even buying a MegaMotors car using the company discount, I had them try to screw me.

 

[jazz4cash]

Infinitely easier with transparency of the web and the computing power of a smartphone to match wits with the auto finance guy. I remember when they’d run your credit (beacon score) and frown at the results but they were not permitted to show you the score. I was very lucky to always have access to a good credit union.

 

[JoeWras]

I wonder how a car finance guy would react if I brought my laptop, called up my spreadsheet, and figured out the monthly payment myself, thereby exposing any shenanigans like the one you described with the credit disability insurance?

Who cares? He or she doesn't care how we feel after they pack the deal with as much crap as possible.

And why should we even have to worry about this? Because our lawmakers are in bed with dealers, that's why. They let the slime and hidden charges continue.

This would make me furious, too, but don't blame Toyota or any other car company. The dealers have an amazing amount of leeway in the way they run their businesses, often protected by local and state laws. In my work as a MegaMotors engineer, I was disgusted by the way some dealers treated people. Even buying a MegaMotors car using the company discount, I had them try to screw me.

Exactly!

I know there is always a lot of focus on the big general presidential election, but frankly we need to pay more attention to our local lawmakers and our local laws because those are the ones that affect us day to day and can really, really hurt.

 

[foxfirev5]

Just like your home, the key is to have as few transactions as possible over a long period of time. Expenses matter, following the investment advice of many on this forum.

 

[athena53]

This would make me furious, too, but don't blame Toyota or any other car company. The dealers have an amazing amount of leeway in the way they run their businesses, often protected by local and state laws.

The loan was with Toyota Motor Credit Corporation. Separate entity, I know, but I suspect Toyota and the dealer got a cut. The only way I could make sure Toyota never got another dime of my money was never to buy one again.

 

[JRon]

I've had good luck at one dealership group (several car brands and locations) in particular. I do all my shopping on the internet and then go in and offer my price. If they want more, I don't get heartburn - just walk out. If they accept my price, then we have a deal. I kind of enjoy a little back & forth with them.

 

[travelover]

The loan was with Toyota Motor Credit Corporation. Separate entity, I know, but I suspect Toyota and the dealer got a cut. The only way I could make sure Toyota never got another dime of my money was never to buy one again.

Your choice. Toyota makes great cars.

 

[Retch The Grate]

woman in who gave a pitch on a prepaid maintenance package, plus $500 off your next car (and this package cost ~$900). My quick calculations were that we would probably spend that much in maintenance, we were tired, foggy, just wanted it over with, so we caved. Typical MO, right?

Anyway, I think we got about $600-700 value out of that $900, so I can chalk it up to the school of hard knocks.

When I bought my last car the finance guy offered a pre-paid maintenance package, I knew how much I spent and it seemed like an ok deal, so I took it. When it came time to schedule my first maintenance, the service department was like nope, that package doesn't cover this maintenance. I was livid, got them to cancel the package and return some of the money, and now I know for next time, they will just outright lie about what they are selling you.

 

[Koolau]

Your choice. Toyota makes great cars.

I absolutely agree. I've had several and have one now. Unfortunately, DEALERs still sell 'em, but YMMV.

 

[OldShooter]

... I know for next time, they will just outright lie about what they are selling you.

The bold print giveth and the fine print taketh away.

Most of these "warrantys" include a fairly lengthy "exclusions" section. My son sent me one to look at, one he was thinking about buying. Bumper-to-Bumper maintenance, it said. Exclusions included the brakes, fuel injection system, the electrical system, and the air. About the only thing that was covered was a rod coming through the side of the block and at that it did not cover R&R of the engine. Another trick is to deny coverage if oil changes and manufacturer-recommended inspections are not conducted at their exact time and mileage specifications.

I would say to read the exclusions, but it is quicker to just reject the warranty. They are never any good.

 

[Scrapr]

Thirty months later I call them. I still owed $1,000. No break on the finance charges unless you paid it off in a lump sum- no break at all for accelerating payments. I was livid. It was one of the reasons I never even considered a Toyota again.

I hope they don't still do that.

We buy Hino trucks for our business. Hino is the Toyota truck arm. Love the truck. Hate the financing through Toyota. I want our trucks paid off in 4 years. When submitting the paperwork truck dealer marked 5 years. That really messes up our "flow" on paying off & purchasing trucks. So I calculated the amount to send in for 4 years & sent that in. IIRC Toyota financing would not accept the check. It was a F'n mess trying to get that straight. We chose another financing option after that experience

 

[Out-to-Lunch]

When I bought my last car the finance guy offered a pre-paid maintenance package, I knew how much I spent and it seemed like an ok deal, so I took it. When it came time to schedule my first maintenance, the service department was like nope, that package doesn't cover this maintenance. I was livid, got them to cancel the package and return some of the money, and now I know for next time, they will just outright lie about what they are selling you.

Wow, I did not encounter that. My package was pretty comprehensive, and I did not pay a dime until it was up.

 

[rrs26ja]

Lease Car Return

2 years ago I leased a 2019 Chevy Equinox for 2 years and 24,000 miles. My 2 years will be up in February and I only have 15,200 miles. The car is in excellent condition no dents, or scratches. I am looking at another lease but not GM. I am looking at an Acura RDX SUV. MY question is what should I expect in returning this lease? What are this sites recommendations on negotiating a lease with Acura?

 

[Global Wizzo]

So far, I have found higher end dealerships: MB, Land Rover, BMW, etc are much easier to work with and the service departments more honest.

Recently had to buy a van. Dodge/Chrysler dealer in Central GA. Spent a while, got an acceptable price, but the whole experience left me pissed off at the dealership for lying, forcing me to let them do and charge for registration. (I ended hand walking the registration to DMV 60 days later after they screwed it up.

Dealerships that churn the sales staff are places to avoid.

 

[athena53]

I want our trucks paid off in 4 years. When submitting the paperwork truck dealer marked 5 years. That really messes up our "flow" on paying off & purchasing trucks. So I calculated the amount to send in for 4 years & sent that in. IIRC Toyota financing would not accept the check. It was a F'n mess trying to get that straight. We chose another financing option after that experience

I guess they haven't changed, huh?

 

[jayanu]

Car buying was worse than going to a Dentist!
1) We had two children 2.5 and 1 year old - one was in a stroller. The salesperson did not even offer a chair to my wife to seat and wanted to negotiate. We left and the sales manager came running and kept calling us every day for a week.

Rule - Keep poker face and be willing to walk out.

2) it was the 1980s with an oil embargo and an 18% Mortgage rate. Went shopping with Edmunds car buying information with particular configuration. Had read a book written by a former car salesperson detailing all the shenanigans (I have to talk to my manager - goes to drink coffee, come back with a red pen marked down by $100, etc.).

Told the salesperson that this are the specs, I am not buying today, I will pay cash, and I will take his quote (no matter how low it is) and will shop around. He figured out that I am a different type of buyer. He looked at my Edmunds price book. Went to the office and came back with the latest edition and made the quote. He said no one will beat it and be free to shop around.

No one beat it. Bought from him. He wanted to add undercoating and fabric seats vs. vinyl. I refused. I also knew what the end of the month quota was and the mfg kickback was. He agreed but pleaded to have fabric seats for the sake of my children who will have to seat on hot vinyl (not really, they were on a child car seat for 5 years to come).

Finally, my wife agreed to the fabric seat and we bought the car for $!50 more than his cost (including the kickbacks). The next time I went there for a friend, this salesperson told all the sales people that this guy is the champion buyer and the only one who made me sell for $150 more than the true net dealer cost in my 20 years of selling.

You must do your research, be firm, stick to what you want, and don't fall for "extras" for a "cheap" additional price (do not be tempted), and be willing to walk out.

He had to order the car with our specs from Oldsmobile!

 

[SonofCohoes]

2 years ago I leased a 2019 Chevy Equinox for 2 years and 24,000 miles. My 2 years will be up in February and I only have 15,200 miles. The car is in excellent condition no dents, or scratches. I am looking at another lease but not GM. I am looking at an Acura RDX SUV. MY question is what should I expect in returning this lease? What are this sites recommendations on negotiating a lease with Acura?

You can get a payoff from gm on the lease and see what the Acura guys will give you on trade. Turning in a lease with the vehicle you described should be a breeze.

 

[RobbieB]

If you don't like car dealers, try craig's list.